Australia: How to manage workplace stress and minimise the risk of mental illness claims

Research by Safe Work Australia suggests that mental illness
claims caused by stress account for more than 95% of workers'
compensation mental injury claims. These types of claims are often
more expensive than other claims because of the lengthy periods of
absence from work. Here, we examine organisational factors that may
contribute to work-related stress for your employees and the way
your business can tackle some of these issues.

Signs of stress

Signs an employee is experiencing stress include:

reduced productivity and efficiency;

poor performance;

high levels of absenteeism;

stress-related illness, such as anxiety;

increased conflict or a poor relationship with colleagues;
and

poor attitude or behaviour.

Legal obligations to reduce work-related stress

You have a duty to maintain a working environment that is safe
and without risks to health (including mental health), as far as
reasonably practicable. This does not mean you are obliged to
eliminate stress from work. If, however, you are aware of
circumstances where unreasonable behaviour is causing a degree of
stress, which creates a health and safety risk, you will be obliged
to take practical steps to control the risk.

In most Australian jurisdictions, workers' compensation for
mental or psychological injury is excluded if the injury arises
from or is caused by reasonable management action (e.g. performance
management and disciplinary procedures), which are carried out in a
reasonable manner. There are also a number of other steps you can
and should take to minimise factors that contribute to workplace
stress and reduce workers' compensation claims.

Six factors that contribute to workplace stress

Consider whether the following factors may be an issue in your
workplace, then refer to the checklist on page 5 for how to address
them.

Inadequate job design

Where there appears to be a level of job dissatisfaction or high
staff turnover in a particular team, it might indicate work-related
stress caused by poor job design.

There are a number of elements to job design, including:

performance objectives;

areas of responsibility;

role accountabilities; and

key duties.

If these are not clearly set out, it may result in a lack of
clarity about the role and lead to poor performance and stress.
Equally important is how tasks and duties are performed,
including:

the level of autonomy/self-direction;

the ability to have input into decision- making; and

the amount of supervision required for each task.

Tasks should be varied across each of these elements and provide
for discretion in determining how they can be performed.

Where an employee is required to perform meaningless tasks
without any discretion, it could lead to higher levels of stress.
One mode of tackling inadequate job design is to conduct surveys
about employee engagement and job satisfaction, and obtain feedback
in exit interviews.

Poor organisational structure

A business that is structured with low visibility across
different teams can cause employees to experience unmanageable
workloads and tighter deadlines. A poor organisational structure
might also result in employees having less access to supervisors
and other resources required to perform their duties.

Poor support from supervisors and inadequate
resources

Poor support from supervisors and colleagues can lead to longer
work hours and subject employees to unreasonable deadlines. Poor
support might develop from a lack of practical guidance or a
failure by supervisors to make themselves available to discuss
workplace issues. Ensure supervisors are trained to provide
appropriate feedback and performance management.

A lack of adequate resources (e.g. technology and refresher
training) can also contribute to employees becoming stressed and
unhappy.

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Workplace conflict

Friction between colleagues can be a key contributor to
work-related stress. Conflict between colleagues may range from
tensions over assigned work or promotion opportunities to
unreasonable bullying behaviour.

Other forms of harmful behaviour, such as offensive conduct,
inappropriate language or discrimination may also have serious
consequences for employees.

Also be aware of more subtle negative behaviour, including:

isolating or excluding employees;

deliberately overloading a person with work (or not providing
enough meaningful work); and

setting unreasonable deadlines that are difficult to
achieve.

It is important to take proactive steps to resolve conflict
early. Harmful behaviour and prolonged conflict can create a risk
to the health and safety of employees if left unaddressed.

Unresolved conflict may be caused by:

a toxic work culture;

a failure by supervisors or management to address unacceptable
behaviour; or

employees being unaware of how to raise issues with supervisors
or managers.

Employers should be mindful that unresolved conflict and
bullying behaviour can cause serious mental harm to employees and
may result in a compensation claim against your business.

Unreasonable performance management

Performance issues are often only raised once it is too late for
an employee to address them. It is important that performance
management is more than a disciplinary tool, or simply a formal
written and documented process.

Performance management processes that are punitive or provide
feedback to employees that is highly critical may cause employees
to experience increased levels of stress. This can also result
where performance is measured solely on individual or output-based
targets.

While there are circumstances where a formal performance
management process may need to be undertaken, you should ensure
that generally, performance issues are addressed early and form
part of an ongoing and constructive process.

Organisational restructure and job
insecurity

Stress can be caused by employees feeling insecure or uncertain
about their future prospects in the workplace. This could include
circumstances where there is:

an organisational restructure, which may lead to the redundancy
of some positions;

poorly controlled communication in relation to the
restructure/change; and

lack of participation by employees in the process for
deciding/implementing the change.

This might perpetuate feelings of uncertainty and can commonly
lead to stress-related illness. Accordingly, it is important to
control the flow of information and ensure a transparent
process.

This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
individuals listed.

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